PCIT net asset value slumps
Investment manager Principle Capital Investment Trust (PCIT) blamed investors' flight to large caps and the youth of its investment portfolio for a slump in its net asset value.
PCIT, which invests in sectors such as real estate, restaurants and clothes retailers, saw the value of its net assets slide to £69.7m on 31 December 2007 from £89.1m on 31 March.
"The flight into large caps has negatively impacted small and mid cap stocks," PCIT said.
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It said that the average age of its investment portfolio was 21 months, not old enough for its activist strategy at companies it invests in to start bearing fruit. PCIT also said that the redemptions being suffered in the wider investment community were leading to increased volatility in its holdings.
"PCIT is not invested in companies directly exposed to the credit crisis, such as banks and consumer finance," it said.
"Whilst share prices may be impacted due to some of the factors explained above, our investments tend to have solid asset backing and this should limit the fundamental risk in PCIT's portfolio."
